Authored by Charles Hugh Smith via OfTwoMinds blog,

The problem for global corporations feasting on “Inflation” profiteering is that the vast majority of consumers can’t afford another lavish vacation, overpriced vehicle or specious subscription.

A funny thing seems to be happening within “Inflation”: companies are using “inflation” as cover for outrageous price increases that have little to do with actual inflation. Consider a water or electric utility that is directly impacted by rising costs of natural gas / oil. To stay solvent, the utility must pass along their higher energy costs to consumers. OK, we get it: higher input costs such as energy and shipping are passed along to the consumer.

But what about auto and property insurance? Exactly what input costs justify jacking up auto insurance by 14% or property insurance by 20%? Does insurance consume huge quantities of energy and is therefore exposed to higher fuel costs and container rates from Asia? No. Did higher energy costs trigger massive increases in auto or property claims? No.

Readers report getting huge increases in insurance coverage that are quickly rescinded once the reader called their agent and said they’re dropping the policies due to the crazy price increases: voila, the increases go away.

In other words, “Inflation” is an ideal cover for corporations, landlords, vendors, etc. to jack up prices and see if they stick. If unwary consumers just pay the new price, yowzah–instant increase in pure profit. Dropping the jacked-up prices when a few frugal customers complain is a small price to pay for the gravy train generated by consumers who passively accept every increase as “inflation” they can’t do anything about.

I’m also hearing of short-term vacation rentals doubling their daily fee overnight, resorts jacking up daily rates by 50% or more and other egregious examples of jacking up prices and seeing what sticks.

Maybe real input costs have risen 10% due to energy, healthcare, wages, etc., but this provides an excuse for raising prices 20% or more. “Inflation” is a great cover for rapacious profiteering.

The post-lockdown spending-spree of consumers going wild offered a golden opportunity for seeing what other skims and scams will stick. In what qualifies as a parody come to life, a luxury automaker is trying to turn seat-warmers into a monthly subscription.

If that sticks, why not make the engine a subscription, too? Did global corporations finally catch on to Big Tech’s gravy train of turning ownership into subscriptions?

The problem for global corporations feasting on “Inflation” profiteering is that the vast majority of consumers can’t afford another lavish vacation, overpriced vehicle or specious subscription. Their desperate desire to splurge has emptied their coffers, and so once the current splurge fades, there won’t be a secondary wave of splurging that will buy regardless of price.

Frugality will transition from an option to a necessity. And as that transition is reflected in plummeting demand, consumer “Inflation” will drop as tapped-out buyers go on strike–voluntarily or involuntarily.


  1. John M. says:

    This is a dumb article.

    “ReCoRd PrOFits” in a time of a record-worthless currency make for what, exactly? That’s right, same as for us working stiffs: swimming harder just to hold still in Biden’s economy.

    This guy knows that if houses and automobiles cost more to replace due to increases in the prices of their constituent parts and labor that insurance rates need to go up to compensate for that, right? And we are bending an awful lot more metal out on the roads these days, too.

    And sure, some things are going up at a faster rate than inflation. That’s due to this little thing called “supply and demand.” It’s in all the Econ books. Landlords and car companies can keep prices low if they want, but it’s going to lead to shortages (which we have, in fact, seen in my area for both cars and housing, tending to indicate that “sticky” prices are keeping prices lower than equilibrium).

    Everyone wants to be a capitalist but nobody wants to pay market price.


    1. Steven says:

      Your entire argument is build on the shaky premise that the game isn’t rigged from the start, and to a degree that is difficult to fathom.
      The Chosen People tribe that controls and issues the currency essentially has a de facto limitless amount of capital. While there are downstream delayed effects of pumping out huge amounts of currency, the people who feel those effects are primarily proles like (presumably) you and I. The reason is that the print it/press a button, then buy real estate and other tangible finite resources, at which point what they hold goes up in value not only as fast as nominal inflation, but in fact usually faster. By the time ANY of this newly printed currency could even reach proles, the train has left the station, and the tribe has enriched itself, rinse, repeat ad infinitum.

      The Invisible Hand of the market is actually visible and real, it works to enrich the money masters. They practice Modern Monetary Theory, you should look it up.
      Their own text, the Talmud, lays out how they work their tricks (usury, except now they have even more tools at their disposal to enslave and milk the goyim for every drop of blood and sweat than they did thousands of years ago.


      1. John M. says:

        Your critique of my comment is that it’s insufficiently critical of The Juice?


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